Imperfect Synthetic Controls: Did the Massachusetts Health Care Reform Save Lives?
55 Pages Posted: 23 Jun 2018
Date Written: May 2018
In 2006, Massachusetts enacted comprehensive health care reform which served as a model for the Affordable Care Act. I study the mortality effects of the reform using synthetic control estimation, relaxing two critical assumptions required to implement this method. The traditional approach assumes the existence of a perfect synthetic control, which cannot exist if the outcomes of the treated unit are outside of the "convex hull" or functions of transitory shocks. I propose simple modifications to relax these restrictions. The new estimator outperforms the traditional method in simulations. I estimate that the Massachusetts Health Care Reform reduced mortality by 3%.
Keywords: Health Care Reform, Synthetic Control Estimation, Xed Effects, Difference-in-Differences, Parallel Trends, Health Insurance, Mortality, Affordable Care Act
JEL Classification: I13, C23, I18
Suggested Citation: Suggested Citation